Commitments and Incentives

Georg Fischer has been recording and analyzing environmental
indicators since 1997. The global reporting system was upgraded in
2005 to include social performance data and was expanded into the
Sustainability Information System (SIS). Various policy documents, for
instance the Social Responsibility Policy, support the mainstreaming
and implementation of these policies in the 30 countries in which we
now operate.

Transparent objectives

The currently applicable sustainability objectives were adopted by
the Executive Committee and cover the five-year period from 2010 to
2015. At the operational level, the divisions and the Corporate
Companies derive their environmental and social objectives from these
quantified targets valid throughout the Corporation. Achievement of
the targets is monitored by means of a corporation-wide reporting
system. The environmental goals include, for instance, a reduction in
CO2 emissions and an improvement in energy efficiency. The
social responsibility targets encompass a reduction in the accident
and absence rates and the fostering of employee development by means
of modern training programs. The general sustainability objectives
also call for sustainability aspects to be embedded in Georg
Fischer’s cooperation with suppliers (the GF Supplier Code).
Every two years Georg Fischer publishes a sustainability report (which
it updates every year) to record to what extent these targets have
been achieved. The full sustainability report appeared for the first
time in 2006 for the 2005 reporting period. Georg Fischer will publish
its next interim report with extensive data in June 2013. The report
is made in accordance with the GRI guidelines (Global Reporting
Initiative) and is audited by an independent auditing board.

Management systems

In 2007 Georg Fischer decided to have all its production sites
certified to OHSAS 18001 (Occupational Health and Safety Assessment
Series). This certification, which is compatible with ISO 9001
(quality management) and ISO 14001 (environmental management),
integrates occupational safety and health protection into the
management system. By year-end, 36 out of 41 production sites in scope
were in fact certified, a success rate of 88 percent. Newly founded or
acquired production companies must achieve OHSAS certification within
three years at the latest.

Reporting systems

The systematic recording of sustainability figures, which was
initiated in 1997, is carried out by all production companies and by
all Sales companies with more than ten employees. In the year under
review, 91 operations, or close to 100 percent of all employees, were
covered. The Sustainability Information System (SIS), which has been
steadily upgraded over the years, ensures that the data are compiled
and that they are comparable corporation-wide. Trained employees in
the local companies collect and report the data, which are then
consolidated and analyzed in the central database. The findings form
the basis for monitoring success and for sustainability reporting and
also serve to formulate future objectives.

The Contaminated Land Register (CLR) lists all sites at which there
is a suspicion of potential legacy waste problems caused by
contamination of the soil. No such listed sites are known to require
any measures. The Contaminated Land Register is updated regularly.

Organizational measures, training plus information and advice ensure
that the Corporate Companies are able to comply with local legislation
and the principles of business ethics applicable in the Corporation.
The Executive Committee and the Board of Directors receive a report
each year. Binding directives ensure that there is absolutely no
leeway in areas crucial for an international industrial corporation
such as violations of anti-trust law or acceptance of unlawful
advantages and that no exception will be permitted to the principle of
legal compliance. Employees may report infractions of the law or
internal guidelines to their line manager(s), Corporate Audit or
directly to the Compliance Officer, anonymously if they so wish. This
option of whistleblowing is another instrument designed to prevent
illegal behavior. No use was made of this option in 2012.

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Environmental Targets

Energy

The challenges of the future include climate change, the finite
nature of fossil fuels, and a steep increase in the demand for energy.
In 2011, Georg Fischer generated about 738,000 tons of CO2
emissions, of which fossil fuels accounted for 293,000 tons and
electricity for 437,000 tons. Business travel by car or plane produced
around 8,000 tons.

Energy efficiency

Energy will be among the most important and ever-diminishing
resources in the coming decades. Consumption is steadily increasing
particularly in the emerging markets. According to the International
Energy Agency, energy consumption will grow by 45 percent in the next
20 years. Georg Fischer has set itself the goal of increasing energy
efficiency in production in each division by 10 percent. All the
divisions of Georg Fischer are developing innovative solutions such as
flow-efficient diaphragm valves, light-weight components for vehicles,
and energy-efficient tool-making machines. In addition, all the
divisions of Georg Fischer contribute, through their products and
solutions, to increasing energy efficiency in operations and to
lowering energy consumption. For instance, flow-optimized valves can
reduce the pump input power needed in a plant. Another example is
energy-efficient generators that reduce the power consumption of
machining centers.

Resource-efficient innovation

Like energy, other important resources are also becoming scarcer and
more expensive. For instance, the prices for crude oil, a crucial
means of production, have risen by about 30 percent in the last two
years. As a result, the development departments have introduced
processes for resource-efficient innovation (eco design, life cycle
assessment). These processes help ensure that product-related
sustainability and resource efficiency issues are taken into account
as early as the development stage of new products. Developers have to
take the product’s entire life cycle, and not just the
development phase, into consideration. The impact of new products on
the environment is analyzed by assessing the raw materials and
suppliers selected, production, the customer’s use of the
products along with their reuse once their life cycle has expired.

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Social Objectives

Net value added

Profit is the focus of every corporate report. For the economy as a
whole, however, the factor that really counts is net value added. Net
value added is the added value that is available after all external
costs have been deducted. At Georg Fischer, net value added came to
CHF 1.078 billion in 2012, compared to CHF 1.125 billion in 2011. More
than 80 percent of this amount was paid out to employees as wages and
salaries. Taxes and duties paid to the public purse accounted for 3 percent.

Safety at work and health protection

Occupational safety and health protection are integrated into the
management system in all production companies and the system is
certified to OHSAS 18001. The production sites of Georg Fischer have
already established ISO 9001 and 14001 as a standard, both of which
are compatible with OHSAS 18001. The next goal defined by the
Executive Committee is to reduce the accident rate by 15 percent by
2015. Georg Fischer will also concentrate on reducing the absence rate
in the years ahead.

Professional training

Georg Fischer has a long tradition of training apprentices. We will
continue, in future too, to make every effort to maintain the high
percentage of trainees in the workforce and to offer attractive
training positions for basic vocational training. Granting interested
school-leavers an early insight into the range of training and study
opportunities is also an integral part of the corporate culture in
training. In 2012, Georg Fischer offered a total of 455 positions, of
which 192 were in Switzerland, for training in various technical or
commercial professions.

Management training

The Georg Fischer Corporation has operated a clear management
development process for a number of years. Vacancies in senior
management can thus be filled by internal candidates in the majority
of cases. In the year under review, managers had the opportunity to
attend a number of basic and advanced training courses important for
their work such as Industrial Business Training (IBT), Financial
Management Training (FMT), People Management Training (PMT), and
Corporate Management Training (CMT). In 2012, an additional training
course, Business Economics and Finance Training (EFT), was
established. This course is tailored to the specific requirements in
China and is held in Mandarin.

About 200 managers from a number of different countries and all parts
of the Corporation underwent intensive training at Georg
Fischer’s in-house training center at Klostergut Paradies.
Moreover, a corporation-wide initiative on management issues and
cooperation – based on the FranklinCovey program (a management
training institute) – were continued. Managers and employees
from all divisions attend these training courses. In addition, the
three divisions conduct their own training programs, which are geared
specifically to their own operations.

Information

Employees 2012 by region (in %)
(100 % = 13 412)

The employee newspaper GLOBE, which appears regularly in five
languages, keeps all employees up-to-date about issues relevant to
sustainability. In addition, Managing Directors and specialists
receive a sustainability newsletter ZOOM, which informs them about
current events and sustainability trends in society and the world of
science. The larger companies have their own publications which are
regularly distributed to all employees.

Best-practice exchange

Each year, senior management addresses issues of strategic and
operational significance both at the annual two-day conference and at
the regional meetings of the Managing Directors, which are chaired by
the President and Chief Executive Officer. In the past year, the
meetings were attended by 43 Managing Directors. In addition to
discussing strategy and financial management, the managers addressed
human resources management. The two-day sustainability conference
(environmental and occupational safety) held by the German-speaking
Corporate Companies is an important platform for promoting an exchange
of views within and across the divisions. The attendees at the
conference in Nidau (Switzerland), addressed current sustainability
topics affecting the Corporation and the divisions in the areas of
ecology, energy, and occupational safety. At the Corporation level,
discussion centered on the sustainability goals for 2015, and their
implementation status was dealt with at length. In addition, time was
reserved for the exchange of specialist information in the divisions
and for talks by external guest speakers.

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Dialog

Clean Water

The Clean Water Foundation received a donation of CHF 3.5 million
when it was founded at the 2002 Annual Shareholders’ Meeting. To
date, Georg Fischer has donated more than CHF 7.5 million to the
Foundation. This has made it possible to implement more than 100
projects in over 50 countries on four continents. To mark the 10th
anniversary of its Clean Water Foundation Georg Fischer and Caritas
Switzerland have agreed to a partnership for the supply of drinking
water. The Clean Water Foundation of Georg Fischer will provide the
sum of CHF 1 million in cash, which will enable Caritas to provide at
least 35,000 people worldwide with sustainably improved access to
clean drinking water until 2015. Within this partnership, Georg
Fischer and Caritas Switzerland plan a regular exchange of information
between the partners’ technical specialists. GF Piping Systems
will make its know-how and expertise available to Caritas. The primary
aim is to bring about tangible improvements to drinking water access
through the use of innovative methods. Further on the Board of
Trustees supported nine new projects with donations of close to CHF
600,000 in Afghanistan, Moldavia, Nicaragua, Laos, Ethiopia, Kenya,
South Sudan, Tajikistan, and Pakistan.

Contributing to the common good

Georg Fischer supports employees who work for the good of their
communities. In accordance with its fundamental values and corporate
principles, Georg Fischer undertakes to promote cultural, social, and
environmental involvement and contribute to the common good. The
holding company and Corporate Companies are involved in many local
projects at their respective locations. In 2012, the Corporation spent
about CHF 2 million on such projects. In addition, some 30 Corporate
Companies supported local activities, with considerable contributions
in some cases.

Sustainability dialog

Sustainability and resource efficiency play a crucial role for Georg
Fischer’s customers too, for instance in the automotive
industry. Customers carefully examine evidence of sustainable
production as well as technological competence, quality, and price
when selecting suppliers. GF Automotive was again invited to the 4th
“Daimler Sustainability Dialogue” in November 2012. Over
100 stakeholders from business, politics, and social organizations
discussed the issue of sustainability.

Awards

Clean Water projects 2002 – 2012

Georg Fischer regularly receives awards for its unwavering commitment
to sustainable practices. In 2012, for instance, it was the sector
leader Index Group SMIM in the Carbon Disclosure Project (CDP). GF
Automotive won second place in the ÖkoGlobe. The ÖkoGlobe
confers its awards for pioneering innovation in the area of
sustainable mobility. GF Automotive impressed the jury with the bionic
design for its steering knuckle. Bionics is the combination of biology
and engineering. In the most comprehensive sustainability rating in
Switzerland, published every year by the business magazine Bilanz,
Georg Fischer again won first place among industrial companies, as it
had done in 2011. All these awards are a commitment for Georg Fischer,
but they are also an incentive for us to abide by our sustainability
efforts and to intensify them further.